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The Employment Relations Act 2000 came into effect on 2 October 2000 . It sought to redress an imbalance in bargaining power by focusing on the employment relationship, rather than the employment contract.

Section three of the Employment Relations Act sets out the following objectives:

to build productive employment relationships through the promotion of good faith in all aspects of the employment environment and of the employment relationship—
- by recognising that employment relationships must be built not only on the implied mutual obligations of trust and confidence, but also on a legislative requirement for good faith behaviour; and
- by acknowledging and addressing the inherent inequality of … power in employment relationships; and
- by promoting collective bargaining; and
- by protecting the integrity of individual choice; and
- by promoting mediation as the primary problem-solving mechanism; and
- by reducing the need for judicial intervention.

The then Minister of Labour Margaret Wilson told Parliament:

‘The fundamental premise underlying the Employment Relations Bill is that the employment relationship is a human relationship, not just a contractual or economic one. Human relationships that function well and efficiently are based on mutual trust, confidence and fair dealing. That requires that the relationship is based on a reasonable equality between the parties. Employment relationships inherently lack that equality, unless the employee has particular skills that are scarce in the labour market.’

Wilson, Hon. Margaret. Quoted in Roth, P. and Churchman, P. (2000, October). New Zealand Law Society seminar paper on the Employment Relations Act 2000.

In order to achieve its stated objectives the Employment Relations Act:

recognises and promotes unions by providing that only registered unions may bargain for collective employment agreements
requires employers to provide information to new employees negotiating an individual employment agreement (IEA)
requires employers to give new employees an opportunity to take independent advice before accepting an IEA
requires all parties to the employment relationship to conduct themselves in good faith; this concept is defined differently at various points in order to meet different situations – one of the remaining criticisms of the Act is that this creates uncertainty
provides wide definitions of the parties to the employment relationship, including employers and employees, unions –(both those directly involved in the employment relationship at issue and other unions that might be involved in negotiating the same collective employment agreement), and other employers where they are involved in negotiating the same employment agreement (for example, where a number of unions and employers meet to negotiate an employment agreement that will cover a whole industry)
allows the Employment Relations Authority (ERA) to informally investigate cases (something ordinary courts never do)
obliges the ERA to encourage the parties towards mediation wherever practical (it is only if either party is unhappy with the outcome of this process that they can access the more formal jurisdiction of the Employment Court ).

The Employment Relations Act changed the way we talk about the employment relationship. Language is a powerful tool, and the words of the Act have been chosen carefully to influence the way in which we regard one another in the workplace. The Act focuses on employment ‘relationships’ and ‘agreements’ rather than ‘contracts’. The ‘Employment Relations Authority’ does not adjudicate, but rather investigates ‘employment relationship problems’.

The Employment Relations Act governs the negotiation of employment agreements, and the process by which disputes and grievances that arise within the employment relationship are resolved. There are a number of protections established for bargaining and dispute resolution, and the concept of good faith applies to everyone.

The Employment Relations Act prohibits discrimination against employees on the same grounds covered by the Human Rights Act 1993. That means discrimination is prohibited on the grounds of:

sex (including pregnancy and childbirth)
marital status
religious or ethical belief or political opinions
colour
race
ethnic or national origin
disability
age
employment status (such as being unemployed)
family status (such as having the care of children)
sexual orientation.

Employees who consider that they have been discriminated against may pursue a personal grievance. The dispute resolution processes under the Act can include mediation, investigation by the Employment Relations Authority, and adjudication by the Employment Court .

The Act also provides for employees to take a personal grievance action against their employer if:

they consider that they have been discriminated against because of their involvement in union activities (see section 107 of the Act)
they consider that they have been subjected to pressure either to join a particular union or not to join a union (known as duress, see section 110)
they feel that they have been subjected to racial harassment in the workplace or by their employer
they feel that they have been subjected to sexual harassment in the workplace or by their employer.

In all these cases the discrimination, pressure or harassment complained of can be either direct or indirect. An example of indirect discrimination would be a security company requiring their guards to be at least a certain height, where that height restriction was generally only met by men.

Sexual harassment is defined in section 108 of the Act. It includes behaviour such as promising preferential treatment or threatening detrimental treatment on the basis of a request for sexual favours. It includes the use of language, visual images or physical behaviour of a sexual nature that is ‘unwelcome or offensive to that employee and that, either by its nature or through repetition, has a detrimental effect on that employee’s employment, job performance, or job satisfaction’.

An employee is racially harassed within the terms of the Act if their employer or the employer’s representative uses language (whether written or spoken), or visual material, or physical behaviour that directly or indirectly:

expresses hostility against, or brings into contempt or ridicule, the employee on the grounds of race, colour or ethnic or national origins of the employee
is hurtful or offensive to the employee
has either by its nature or through repetition, a detrimental effect on that employee’s employment, job performance, or job satisfaction.

The Act also provides for employment relations education leave. Employers must make a maximum of five days per year available to employees. The five days are shared collectively between staff to enable them to attend training in employment relations education. The rationale is expressed in section 70 as a desire to increase employees’ knowledge of the relationships between unions, employees and employers, with a view to promoting the objectives of the Act as a whole and, in particular, the notion of good faith bargaining.